Treasury Secretary Scott Bessent has issued a scathing response to Sen. Elizabeth Warren's criticism of the U.S. intervention to support the Japanese yen, sarcastically offering her a tutorial on "Foreign Exchange for Dummies." Bessent, a former currency trader, stated in a letter obtained by The Post that Warren's attack revealed a lack of understanding of foreign exchange markets and banking.
"Terrifyingly, the opening paragraph is wrong about where the money came [from], what the transaction was, and whether there was even a borrower," Bessent wrote in the letter dated Thursday. He added that it was "shocking, but not surprising" that "not a single member of your media mob has a rudimentary-enough level of financial market literacy to spot your remedial error."
Warren, the ranking Democrat on the Senate Banking Committee, had previously demanded details about the Treasury's use of the Exchange Stabilization Fund (ESF) in the effort to bolster the yen, which had fallen to a 40-year low. She expressed concern that American taxpayers could be liable if Japan failed to repay the U.S.
Bessent flatly rejected this premise, explaining that the Treasury exchanged existing ESF foreign-currency assets for yen. "No new congressional appropriation was involved, and no credit was extended to Japan. Japan owes Treasury nothing," he wrote, concluding that "there is therefore no risk that Japan will fail to repay a debt that does not exist."
The intervention marked the first coordinated U.S.-Japan effort to strengthen the yen since 1998. Reports indicated that the Treasury, through the New York Fed, sold euros and bought yen. The precise amount of the U.S. purchase has not been publicly disclosed, although a photograph showed a notepad in front of Bessent with the notation "To Do Buy Japanese Yen (JPY) $5-10 bil."
Warren had cited the lack of details in her Aug. 13 letter, seeking information on the scale of U.S. financial support, potential taxpayer costs, and the legal justification for using the ESF. Bessent responded by pointing out that the statute cited in Warren's own footnote provides the legal basis, stating that Section 5302 authorizes the Treasury secretary, with presidential approval, to engage in foreign exchange transactions to support orderly exchange arrangements. "Treasury’s legal analysis begins with reading the statute. I recommend you try the same," Bessent wrote.
He also defended the intervention as a measure to protect U.S. economic interests, noting Japan's significant holdings of U.S. Treasuries, its role as a key trading partner, and its status as a treaty ally. "Disorderly yen markets can trigger forced unwinds, which could destabilize global markets and ultimately raise borrowing costs for American families and businesses," Bessent argued. He concluded his remarks on the matter by suggesting Warren and her staff enroll in an "entry-level course in international finance" or accept his offer of a "Foreign Exchange for Dummies" tutorial.
According to government data released Friday, Japan spent approximately $96.5 billion intervening in foreign-exchange markets between July 30 and Aug. 26. Bessent closed his letter by stating, "The American people deserve oversight grounded in facts rather than slogans," and expressed hope that Warren's future correspondence would demonstrate an understanding of the difference between a currency purchase and a swap or loan. The Post has sought comment from Warren.